Last time we checked in with Paul Ceglia — the Man Who Would Be King of Facebook — and his lawsuit claiming partial ownership of the social media giant, he was facing sanctions if he refused to provide Facebook with a very touchy document known as the Kasowitz letter.

Well, the production deadline has come and gone, and there’s no letter. You know what that means. All aboarrrd! Next stop, Benchslap City…

We mentioned the document earlier this summer. For a refresher, what exactly is the Kasowitz letter? Yesterday’s order explains:

Defendants specifically seek a court order directing Plaintiff to produce a letter referred to as the “Kasowitz letter,” from the New York law firm of Kasowitz, Benson, Torres & Friedman to DLA Piper and Lippes Mathias Wexler Friedman, all law firms that formerly represented Plaintiff in this action, in which Kasowitz advises DLA Piper and Lippes Mathias it is withdrawing from the case based on a determination that the purported contract at issue is a fraud.

Uhhhh. That sounds like Ceglia’s own former counsel were running for the hills AND apparently suggesting other firms do likewise. That’s NOT something lawyers at my high school used to do. Especially lawyers at well-known, aggressive firms such as Kasowitz.

Ceglia has blown off several deadlines to produce the letter, and there are all kinds of privilege issues radiating off the document. Magistrate Judge Leslie Foschio ain’t having it. He fined Ceglia $1,000, plus attorneys’ fees and costs (it’s not the first time he’s been fined), in a decision that underscores the importance of a properly prepared privilege log:

Despite two court orders directing Plaintiff to produce the Kasowitz letter to Defendants, Plaintiff submitted the Kasowitz letter to the court for in camera review. Not only was the submission of the Kasowitz letter to the court unsolicited, but in camera review of the letter only serves to corroborate the court’s earlier determination, i.e., that the Kasowitz letter is relevant to the genuineness of the dispute contract, the issue before the court on Defendants’ pending motions to dismiss, and, as such, either should have been produced to Defendants or included in a privilege log. The failure to include the Kasowitz letter in a privilege log, however, waives any privilege that otherwise could have attached….

That the Kasowitz letter was never disclosed in a privilege log, given its obvious relevance to the issue of whether the contract at the heart of this litigation is genuine, is beyond cavil…. Moreover, the attempt to goad the court into further review of the Kasowitz letter by its unsolicited submission to the court only served to further delay compliance with this court’s orders. Such conduct is beyond disrespect and will not be countenanced.

Orin Snyder, partner at Gibson Dunn and attorney for Facebook and Mark Zuckerberg, released another rather excited (wouldn’t you be excited too?) statement about the ruling:

Today’s ruling imposing monetary sanctions on Ceglia and his lawyer demonstrate that they continue to show brazen contempt for the Court. It is bad enough that Ceglia is perpetuating a massive fraud on the court. His ongoing contempt makes it all the more reprehensible.

How much longer will this case continue? How much longer can it continue? It’s starting to look more like the soul-crushing end to a game of Monopoly, in which the loser starts hemorrhaging money, than a court case. And it seems Facebook’s counsel just put a hotel on Park Place.

DECISION and ORDER re Defendants’ 7th MTC [U.S. District Court for the Western District of New York]

Earlier: Benchslap of the Day: Ceglia Gets Slammed (Yet Again)
What Are the Newest Developments in Ceglia v. Facebook? Oh Yeah, and an Interview with Paul Ceglia


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